China talks about the yuan again

China Central-Bank Adviser Urges Yuan Reform


BEIJING—Xia Bin, a member of the Chinese central bank's monetary advisory committee, said China should aim for full yuan convertibility over the next 10 years.

WSJ article

China to World: We Want Your Imports

BEIJING - China will send two large trade delegations to the United States and two to European Union nations this year to help stimulate its imports, said the head of China's trade promotion organization.

Delegations to US, EU will correct trade imbalance

Wan Jifei, chairman of the China Council for the Promotion of International Trade, told China Daily at the sidelines of the annual session of the Chinese People's Political Consultative Conference (CPPCC) National Committee, that China will send many more trade delegations to developed nations in 2011 than in previous years.


article: Delegations to US, EU will correct trade imbalance

Chinese Treasury Holdings Revised $268 Billion Higher To $1.12 Trillion

source: Treasury International Capital website

Premier Wen Jiabao: Slower economic growth in China to reduce inflation risks

 

Beijing to Slow Growth 

BEIJING—China's premier said the government wants slower economic growth to avoid inflation and to restructure the economy, even as much of the developed world is struggling to accelerate expansion.


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Hot Money Hits China

China says 2010 'hot money' flows hit $35.5 bn

BEIJING (AFP) – China said Thursday that net speculative capital inflows into the country last year equalled $35.5 billion, and vowed to maintain a crackdown on so-called "hot money".

China has sought to limit flows of volatile "hot money", which enter and exit nations in search of swift profits and are often blamed for destabilising markets as they tend to depart at the first sign of trouble.



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Gary Shilling on China's "Hard Landing"

video interview

China is looking at the Yuan (again)

China Opens More Options for Yuan

SHANGHAI—China said it will allow yuan foreign-exchange options to be traded domestically starting in April, a long-awaited move to give companies more hedging ability—part of Beijing's broader push to build a more sophisticated currency regime.


WSJ article

China food prices

China's farm produce prices slightly down last week: MOC

BEIJING - In the week ending February 13, farm produce prices in China declined slightly for the first time this year, the Ministry of Commerce (MOC) said in a report released on Tuesday.

As the week-long Spring Festival holiday ended, abundant supply and weakening demand had brought down vegetable prices last week, said the ministry.

Compared to a week ago, the wholesale prices of 18 staple vegetables and 8 aquatic products went down 4.3 percent and 0.9 percent, respectively, it said.


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China Auto Sales Slow

SHANGHAI (AP) -- China's passenger car sales slowed in January as tax breaks for energy-efficient cars lapsed and cities began tightening curbs on vehicle use to help combat traffic congestion and smog, according to a report Monday.

The Shanghai-based China Passenger Car Association reported that sales of passenger cars fell 10.3 percent in January from the month before to 965,238. On an annual basis, sales rose 12.6 percent.

Chinese bought 13.7 million passenger vehicles last year, up by a third from 2009. But that robust growth is forecast to cool this year due to the expiration of tax incentives for some vehicle purchases and a renewed effort by cities to bring traffic under control.

"Of course the withdrawal of financial incentives would impact any country's auto market, and sales did continue to grow in January, but toward the end of the month there was a sharp cooling in sales," the Passenger Car Association report said.


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China Up, Japan Lower

Rising China Bests a Shrinking Japan

China passed Japan in 2010 to become the world's second-largest economy after the U.S., a historic shift that has drawn mixed emotions in the two Asian powers: resignation tinged with soul-searching in long-stagnant Japan, pride but also caution in an ascendant China wary of shouldering new global responsibilities.


WSJ Article

PBOC plans overhaul of money policy

China's central bank is planning to use an indicator measuring total financing quantity and broader measures of money supply, such as M3 and M4, to better monitor liquidity conditions and curb inflation, local media reported on Thursday.


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Chinese Developers Move Inland

Chinese developers are building more homes in cities across the nation away from the financial hub of Shanghai and the capital Beijing, which may be the hardest hit by government measures to curb property prices.


Bloomberg article

China: A 30% Crash In The Property Market

From Shanghai Daily News (Google translation from simplified Han):

Regulation has been to attack the third round of first-tier cities real estate prices down 30%

Thunder attack the third round of real estate regulation, the rapid combination of boxing, so property prices forced counterattack, a few days could not proud of the real estate business and speculators by surprise. This time, a property "hot pot" of the "lid" was covered up.

Increase purchase cost, the purchase of, property tax, this three-pronged approach, if implemented in place, the actual interest rate has been through administrative restrictions and basically blocked the tax price of the property market investment (speculative) demand.

That property prices continue to rise, "lid" was tightly closed out. At the same time, "further implementation of local government" and "the construction of housing projects to increase security efforts", the attempt to increase the supply of low-rent housing on the market, "pot" to root of the problem.

After this shot of a combination of boxing, I believe that covers "lid" will directly effect. Property market turnover will be greatly reduced, as the CPI is likely to continue to promote further interest rate rise, real estate holding costs will continue to increase, investors who own multiple sets of housing will withstand the pressure to sell vacuum, once the panic selling a conservative estimate, prices have to appear about 30% pullback.

New "state of eight" and the property tax was intended to curb property speculation, if the effectiveness of control there, holding costs sharply, but more substantial price correction, then the past 10 years, the emergence of many hundreds of millions of Chinese cities, million "property rich" will be their colors.

It is true that the local government to increase efforts in building affordable housing projects, the author is not optimistic, because the event of a fall in property prices, local government finance will decrease the land, local government expenditure in the expanding case, expect them to spend more money for housing support, which is obviously unrealistic. Only a few strong ability to govern the city, it is anticipated to increase in 2011 the so-called efforts to protect the room is still on paper.

In the new "National Eight" and after the introduction of property taxes, house prices in 2011 is yes, then the next problem is that people are most concerned about - how much will fall?

Unfortunately, house prices will fall much, not primarily controlled by the Chinese, how much house prices will fall, the key to CPI (an important factor in the decision to raise interest rates); the CPI mainly agricultural products (16.70, -0.40, -2.34%), price determination; the prices of agricultural products mainly by the United States or U.S. agricultural futures markets and Wall Street's financial oligarchy decision. Despite the gains in agricultural products in 2011 has been crazy, but the international investment bank is still talking up the recent agricultural products, while vigorously pushing up oil prices - fertilizer and other major agricultural products are produced from petroleum.

That the future we may see the prices of agricultural products continued eruption scenario. The logic is this: abnormal weather and natural disasters (such as the present drought in north China) - International investment bank pushed up oil prices - prices of fertilizer and other agricultural materials - Chinese farm products are rigid gap - the international hot money frenzied speculation - agricultural prices continue to soar - the CPI rose to more than 10%, mortgage interest rates to 12% or more - more and more Chinese who can not afford the interest stuck with speculation - have to sell from the start of a small amount of falling house prices, but it is difficult sell - a lot of panic selling, housing prices fell.

Conclude that China's rate of falling house prices, the petroleum and agricultural price rises in the decision.

In addition, the decision to declines in property prices in China, there are two important factors:

First, China's monetary tightening efforts, a variety of information from the current point of view, not in the short term reversal of contraction. Recently, the central bank governor Zhou Xiaochuan also said that despite the deposit reserve rate has been high, but the future will still use the tools and the central voting issue to hedge liquidity. Second, the decision on whether a large-scale withdrawal of international hot money in China.

Overall, prices in China for the future, I am not optimistic. Those who still holds a lot of investment houses were in big trouble, the property market and, unlike stocks, transaction costs are very high, sell when up, or when the shot is very difficult to do. Of course, a few brave people can ton output capacity, but most will put the lid on, as has been in the "frog" in the continued heating, it had lost the strength to flee.

There are a lot of trouble holding the same land, but cash flow poor real estate agency in the next couple of years than they are likely to encounter more challenges in 2008. Dragged by the property market, the stock market is difficult to be optimistic.

The coming year, the Chinese economy and Chinese enterprises will face very serious challenges, the extent to less than 2008, the appreciation of the RMB, high resource prices, high agricultural prices, labor costs, etc., the cost of increasing rigidity in China; The high reserve ratio, high interest rates, falling house prices, stock prices fell, and so will become scarce liquidity. In this backdrop, Chinese companies are still profitable if it must have extraordinary ability.

Investor Alert: China Agritech

China Agritech: Factory Visits Reveal a Scam


Based on our research, which includes factory visits and discussions with customers, competitors, and government officials, as well as examinations of Chinese financial filings, we think that China Agritech does not have a currently functioning business generating anything close to $100 million in revenue. We’re very confident that the company is a scam.


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IMF: China and India will lead economic recovery

China buys gold and the world follows

By Myra P. Saefong, MarketWatch

SAN FRANCISCO (MarketWatch) — Gold prices have lost around $75 an ounce this year but analysts are unfazed by the drop, with many betting the slump in prices will soon be cut short as the Chinese New Year feeds an increase in global demand that’s destined to last.

“We are entering a period of strong seasonal growth in gold demand and Chinese New Year is a big part of that,” said Brien Lundin, editor of Gold Newsletter. “Physical demand has been supporting the gold prices on the downside even during the typical slack periods, and I expect that upcoming increase in demand will also support the price, but at higher levels.”


MarketWatch Article

China's new stealth fighter may use US technology

SLOBODAN LEKIC and DUSAN STOJANOVIC

(AP:BRUSSELS) Chinese officials recently unveiled a new, high-tech stealth fighter that could pose a significant threat to American air superiority _ and some of its technology, it turns out, may well have come from the U.S. itself.

Balkan military officials and other experts have told The Associated Press that in all probability the Chinese gleaned some of their technological know-how from an American F-117 Nighthawk that was shot down over Serbia in 1999.


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Thomas Friedman On China And America

In a somewhat confusing and very rambling discussion, Friedman notes how he envies China's Reaganism, not Maoism.

Once again, there is no doubt that Friedman remains suspect and his geopolitical views are tainted.